USOIL, dailyOil prices fell more than 2% as concerns about Hurricane Rafael’s impact on Gulf of Mexico production eased, and China’s latest economic stimulus measures failed to impress oil traders. Rafael, now a category 2 hurricane, is expected to stay centered in the Gulf, reducing risks to oil output. China’s fiscal support focused on easing local government debt rather than stimulating demand, disappointing investors amid ongoing deflationary pressures and a sixth consecutive monthly decline in China’s crude imports. Despite these losses, oil prices rose over 1% last week due to expectations that new U.S sanctions on Iran and Venezuela could reduce global supply.
On the technical side, the price is currently testing the support level of the 23.6% of the daily Fibonacci retracement while the Stochastic oscillator is in neutral levels hinting that the price has the potential to move in either direction in the short term. The faster 50-day moving average is trading below the slower 100-days validating the overall bearish trend in the market, at the same time the Bollinger bands have somewhat contracted showing that volatility is slowing down in the market for crude oil. This could mean that there might be some sideway movement in the coming sessions and there might need a new catalyst to perform any significant moves.
